U.S. Treasury yields in focus as investors track economic data

THE 10-year Treasury yield briefly hit a new high for the year on Wednesday, adding to big gains from the previous session as private payrolls data beat forecasts.

The benchmark rate added about 2 basis points to 4.385%. At one point, the yield reached its highest level since late November.

THE Yield on 2-year Treasury bills has changed little, the last session at 4.695%.

Yields and prices move in opposite directions. One basis point equals 0.01%.

ADP’s private payroll data released Wednesday morning showed stronger growth than expected. Businesses added 184,000 workers in March, higher than the 155,000 estimates of economists surveyed by Dow Jones. This is also the fastest pace of growth since July 2023.

The market moves come as investors track economic data and closely watch cues from Fed policymakers on the expected number of interest rate cuts in 2024. Traders estimate there is a 94% chance that rates remain unchanged at the Fed’s policy meeting in May, according to the CME Fed WatchTool. from Wednesday morning. They expect a 54.2% probability of reduction at the June rally, a significant drop from the 70.1% figure seen a week ago.

Atlanta Fed President Raphael Bostic said he expects only one rate cut this year, which would occur in the fourth quarter. He is one of several central bank officials, including Chairman Jerome Powell, expected to speak at events across the country on Wednesday.

Cleveland Federal Reserve President Loretta Mester said Tuesday she still expects interest rate cuts this year, but ruled out them being implemented at the next policy meeting in may.

Separately, San Francisco Fed President Mary Daly said she expects cuts this year, but not until there is more convincing evidence that inflation has been brought under control.

Last month, the U.S. central bank met expectations and left monetary policy unchanged for the fifth time in a row, keeping its benchmark overnight borrowing rate within a range of 5.25% to 5.5%. .

The Fed also indicated at the time that it still expected cuts of three-quarters of a percentage point by the end of the year.

— CNBC’s Jeff Cox contributed to this report.